Launch of the 2016 Michael Page Salary & Employment Outlook report
The 2016 Michael Page Greater China Salary & Employment Outlook report was released at an ECCT Premium Event Lunch. The report, presented in association with the ECCT, provides an outlook for the domestic recruitment market in 2016 across a range of sectors including retail, financial services and technology. In addition, it presents insights into employment conditions, key employment skills in demand, sector trends and salary benchmarks. The report draws on online survey responses from over 1,000 employers across Greater China (Hong Kong, mainland China and Taiwan) as well as insights received from a series of roundtables held with employers across the region. A summary of the highlights of the report were presented at the lunch by Andy Bentote, Senior Managing Director of Michael Page and Page Personnel Hong Kong, Southern China and Taiwan. Also at the lunch, Andy Leung, Consulting Director for Aon Hewitt gave a presentation on what makes a company a good employer.
Using the weather as metaphor, Bentote described the outlook for the Greater China region as partly cloudy with sunny spells. On the bright side, close to two thirds of employers in the Greater China region expect hiring activity to be either steady or stronger while approximately half (47%) of them expect to increase headcount over the next year. Bentote expressed the view that multinational employers are slightly more cautious in their outlook than their local counterparts in the region.
The three most sought-after functions in the region are sales/marketing/business development, information technology/digital development and engineering/manufacturing. In terms of bonuses, 50% of employers in Greater China expect bonus ranges to be 1-10% while 19% of companies expect to offer no bonuses. In terms of annual salaries, 59% of employers in Greater China expect to give a 1-5% increase while 25% of them (mostly in mainland China) are expected to offer an increase of 6-10%.
In the region as a whole, the top three factors in attracting and retaining talent are 1) an increase in salary (63%), 2) scope for career progression and 3) learning and development initiatives (42%). Employers in the region are increasingly placing more emphasis on work-life balance in the workplace. The three most common initiatives introduced across the region are sabbaticals, flexible working arrangements and team building offsite activities.
Turning to the situation in Taiwan, 64% of employers expect hiring activity to be either steady or strong while 53% of Taiwan-based employers plan to increase headcount. The most promising industries (those that are expected to experience growth) are 1) Digital; 2) Healthcare and pharmaceutical and 3) Technology. Bentote commented that growth in the technology sector is expected to come less from established industries such as semiconductors and computer hardware and more from new areas such as mobile applications and cloud computing. Industries where activity is expected to remain static are luxury retail, fast moving consumer goods and financial services. Bentote added the caveat that activity for back-office functions in the financial industry such as risk and compliance positions will remain robust.
In terms of staff turnover, Taiwan remains and is expected to remain more stable than elsewhere in the region. Only 23% of employers in Taiwan expect turnover to be more than 10% compared to 34% in the greater China region.
The most difficult positions to fill (or replace) are sales/marketing/business development, followed by IT/digital management and engineering/manufacturing. 83% of employers in Taiwan expect to give salary increases of less than 5% while 71% of them are expected to give bonuses of less than 10% of annual salary.
Taiwan differs from the region in that the scope for career progression is regarded as a more important factor in attracting and retaining talent than salary (although salary and learning and development are also important factors, as they are in the rest of the region).
Bentote suggested that there may be a gap between company policy and perceived benefits in terms of flexible working arrangements. While 65% of employers in Taiwan believe that flexible working arrangement are in place in their companies, only 28% of employees in Taiwan said that they were enjoying this benefit. 29% of surveyed employers in Taiwan said that they would consider hiring overseas workers while 34% of them are concerned about local talent leaving Taiwan for overseas opportunities.
Looking at trends, Bentote noted that there has been significant growth in start-up businesses particularly in e-commerce and mobile related businesses. Another trend is that the recruitment process now tends to take longer as companies are making more of an effort to find the right people. For example, some companies have started to create additional interview stages and involve extra regional decision makers when making hiring decisions.
While there are challenges in the luxury sector, there has been continued investment from fast fashion in the retail sector. In addition, digital marketing is becoming a core element of brand building and there is an intense demand for e-commerce, digital and cloud computing specialists.
Bentote concluded that there are good opportunities for those seeking work but that the market is competitive. For companies seeking to hire, there are qualified candidates available but their recruitment process has to be efficient and compelling and employers need to focus not just on salary but also on other effective talent retention strategies.
In his presentation Andy Leung gave some highlights from his company's research on what constitutes a good employer. Based on research conducted by his company for 15 years, there is a strong correlation between being a good employer and being successful. According to the company's research the best employers achieve 25% stronger growth in earnings, 58% higher growth in profits and have 17% lower employee turnover levels than their competitors.
According to Aon there are four measurable factors that contribute to how good an employer is: employee engagement, a compelling brand, effective leadership and high performance culture. The best companies have dedicated people managers which are trained to have effective career conversations with employees and to explain rewards. This is crucial for driving performance.